Jul 5, 2024
Homeowners in the Villas of Carillon townhome community of Feather Sound, Florida are trying to wrap their heads around a request from their homeowners association board for a $60,000 special assessment.
The homeowners received notice of the assessment in early June, which detailed how the HOA’s reserves had never been fully funded in its 20-year history, presenting the community with a “significant financial challenge moving forward.”
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Each household was expected to shell out around $60,000, and a vote was set for June 20 to determine the exact payment plan.
“There will be a lot of people that lose their home, either they have to sell or they can't make these payments. They'll have a lien put on their house, foreclosures,” said Tammy Rodeffer, an owner, to WTSP at the time. “I'm concerned about the overall community.”
However, at a special meeting, the owners arrived in hordes to convince the board to hold off on making a decision.
“You need to get together, this problem is not going away,” resident Robert Regan said. “And condos, they need to have 100% reserves.”
And then, in an email after the vote on June 21, the entire board announced it had resigned — effective immediately.
What’s creating exorbitant special assessment fees?
Following the 2021 Surfside collapse — which killed 98 people in Miami due to construction flaws — regulations now require more frequent inspections of condo buildings, while many condo associations are raising fees to build a larger reserve for repairs.
Now, Florida state reforms require reserve and milestone studies and mandate annual contributions to reserves, but they only apply to units that are three stories or higher. The townhomes at the Villas aren’t condos — and they’re just two stories tall.
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The HOA board said that insurance companies would no longer insure the complex in a few years if it didn’t have the necessary reserves to pay for new roofs.
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Not everyone agrees it's necessary
But Patricia Staebler, a certified reserve specialist based in Sarasota, notes that a project’s time-equivalent cost should already be banked ahead of the renovation if the association wanted to avoid any special assessments.
Staebler says these reserve studies should help the board plan for the next fiscal year as well as subsequent years, building in an annual increase over a 30-year period. And while it’s unnecessary for the reserves to be “fully funded” — it is crucial that these yearly assessments are met with the appropriate full funding.
“There is a difference between being 100% funded and funding your reserve requirements for the upcoming fiscal year 100%,” she says. “I've been doing this for 15 years. In my entire reserve specialist career, I have not seen an association which is 100% funded.”
In the meantime, the community’s townhouse owners hope that postponing the vote may give them more time to gain some insight into why the special assessment fee is so high.
“So that we're able to get additional documentation, review all the financials, see how they got to these numbers,” Rodeffer said.
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Serah Louis is a reporter with Moneywise.com. She enjoys tackling topical personal finance issues for young people and women and covering the latest in financial news.
